How Would GASB Proposals Affect State and Local Pension Reporting?
The brief’s key findings are:
- GASB proposes two major changes for reporting purposes.
- Assets would be valued at market rather than smoothed.
- Liabilities would be discounted by a blended rate using:
- the long-run return for liabilities covered by projected assets; and
- the high-grade municipal bond rate for liabilities covered by other resources.
- These changes would reduce reported funded ratios for our sample of large plans from 76 percent to 57 percent in 2010.